The death of the middle man

For many years, the middlemen reigned supreme, connecting their clients to the stuff they need. Sitting in that sweet spot in between the manufacturer and the end users.

That space is dying.

Technology has eroded the middleman. Manufacturers can now easily access their customers directly and cut off the middleman. This move makes sense for the customer who gets to get goods at lower prices. (In some verticals, especially agriculture, the middleman makes even more money than the producer)

You do not need to look too far before you start seeing this things.

Amazon started by selling other people’s things, today they have flipped the whole retailing world. They now directly manufacture and deliver to the end customers. No other wholesaler or retailer needed.

Netflix was content with just licensing shows from studios for their customers to watch, but now, Netflix makes its own shows directly.

Uber is planning to build its own driverless cars, cutting off the drivers and cars that helped them get into the market.

MTN and Glo co-existed peacefully until Glo took the gloves off and crashed the pricing for data. MTN and the other Telcos cannot match Glo’s pricing because Glo is a “wholesaler”, they have their own submarine cable, in fact, they are the first single telecommunication company in the world to own its submarine cable.

MTN and the others are kicked out, they cannot compete with the wholesaler. When Glo is selling 3.2Gb of data for #1,000, how will the others hope to get a foothold?

I read last week that Facebook was beginning to create it own video content (hint: Facebook wants to replace your TV)

This moves are all good for the end user, but it kills off the dominant middleman industry.

If you are in the middleman business, your time is up. You have to move up the ladder into safety: start manufacturing something.


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